The Canadian REITs we’ve discovered have grown their rental revenues by at least 20% per year over the past three years
SmallCapPower | February 13, 2020: According to Investopedia, a real estate investment trust (REIT) is a company owning and typically operating real estate, which generates income. Properties included in a REIT portfolio may include apartment complexes, data centers, health care facilities, hotels, infrastructure—in the form of fiber cables, cell towers, and energy pipelines—office buildings, retail centers, self-storage, timberland, and warehouses. To qualify as a REIT, a company must meet certain criteria with the Canada Revenue Agency. These requirements include investing at least 75% of its assets in real estate, cash, or Canadian government bonds, receive at least 75% of revenue from property rents, and payout 90% of taxable income to shareholders in the form of dividends. If the REIT meets these requirements, then it is exempt from corporate taxes. Today we have sifted through and found four Canadian REITs with the best three-year revenue growth.
*Share prices as at February 11, 2020, data obtained from S&P Capital IQ
** Q3 F2019 (LTM) Revenue used as a proxy for F2019 Revenue
Summit Industrial Income REIT (TSX:SMU.UN) – $13.54
REITs
Summit Industrial focuses on operating in the light industrial sector of the Canadian real estate industry. For reference, light industrial properties are typically one-story properties that are in, or close to, major cities. Examples of the type of tenants that lease its properties are warehousing and storage, light assembly and shipping, call centres and technical support, professional services and various other similar uses. The Company has 108 industrial properties with 13.6 million sq. ft of gross leasable area and an occupancy rate of 99.4%.
- Market Cap: $1,855.9M
- 90-Day Return: +5.4%
- 3-Year Return: +116.7%
- 90-Day Average Trading Volume: 587,370
- Q3 F2019 (LTM) Revenue: $133.2M
- F2016 Revenue: $45.0M
- 3-Year Revenue CAGR: +43.6%
- Dividend Yield: 4.0%
True North Commercial Real Estate Investment Trust (TSX:TNT.UN) – $7.83
REITs
True North Commercial Real Estate currently owns and operates a portfolio of 46 commercial proprieties, which total 3.73M sq. ft of space in urban and select strategic secondary markets across Canada. The Company’s properties are in British Columbia, Alberta, Ontario, New Brunswick, and Nova Scotia. The properties have a 97% occupancy rate. The Company generates 38% of its revenue from government tenants and 41% from credit-rated tenants.
- Market Cap: $663.7M
- 90-Day Return: +11.2%
- 3-Year Return: +28.0%
- 90-Day Average Trading Volume: 218,580
- Q3 F2019 (LTM) Revenue: $101.9M
- F2016 Revenue: $41.4M
- 3-Year Revenue CAGR: +35.1%
- Dividend Yield: 7.6%
American Hotel Income Properties REIT LP (TSX:HOT.UN) – $6.95
REITs
American Hotel Income Properties owns a portfolio of 79 select-service hotels with ~8,900 rooms located principally in secondary and tertiary U.S. markets. The REIT has strong brand partners, including Hilton Holdings, Marriott International, Wyndham Hotel Group, and InterContinental Hotels Group. AHIP is engaged in growing its portfolio of premium branded, select-service hotels in larger secondary markets that have diverse and stable demand. The REIT’s properties range from midscale to upper upscale.
- Market Cap: $543.0M
- 90-Day Return: +10.0%
- 3-Year Return: -34.9%
- 90-Day Average Trading Volume: 162,980
- Q3 F2019 (LTM) Revenue: $338.8M
- F2016 Revenue: $173.5M
- 3-Year Revenue CAGR: +25.0%
- Dividend Yield: 12.4%
Choice Properties Real Estate Investment Trust (TSX:CHP.UN) – $14.68
REITs
Choice Properties owns, manages and develops a portfolio of 756 properties that total 68M sq. ft of gross leasable area. Its portfolio can be broken down into 602 retail properties, 115 industrial properties, 15 office complexes, 4 multi-family residential buildings and 20 development properties. The Company works with retail, industrial, office and residential assets. Additionally, Choice Properties has a strategic alliance with its principal tenant, Loblaw Companies Limited.
- Market Cap: $4,555.1M
- 90-Day Return: +9.0%
- 3-Year Return: +4.5%
- 90-Day Average Trading Volume: 418,960
- Q3 F2019 (LTM) Revenue: $1,348.2M
- F2016 Revenue: $784.4M
- 3-Year Revenue CAGR: +19.8%
- Dividend Yield: 5.0%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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